Friday, August 4, 2017

Codecademy has spent the last several years building a large community of learners with free lessons aimed at teaching its users the basics of how to code. But now it’s betting that many of them will be willing to pay for more intensive courses.

When Codecademy founder and CEO Zach Sims founded the company in 2011, he did so with the hope of allowing more people interested in programming to gain access to educational content they’d need to get started.

Codecademy differed in its approach from the way most people learned how to code at the time. Unlike university lectures or most online tutorials in its early days, Codecademy’s courses were built around learning by doing. That meant putting a terminal in a user’s browser and having them interact with it the same way any engineer would in a dev environment.

Since then Codecademy has grown its user base to more than 45 million learners, most of whom are attracted to the dozens of courses and hundreds of hours of free content designed to teach them the fundamentals.

But of course nothing can remain free forever… And so Codecademy is today launching a paid Pro version of its product, which will offer more intensive courses and more extensive mentoring than it had provided before.

Sims admits that part of the impetus for launching a paid product came from VC headwinds the company faced as it was looking to raise funding a couple of years ago. “Until 2015 we were totally free to users and focused on growing as large as we possibly could,” Sims told me by phone.

At that point, Codecademy determined it would need to come up with something users would be interested in paying for. Since then, the company has quietly been building curriculum and testing it with users to figure out the most engaging lessons and the best price point for a paid product.

The result is Codecademy Pro, which will come in three tiers aimed at capturing different demographics of students with different needs.

The lowest-priced Pro Tier costs $19.99 a month and offers a personalized learning plan designed to let users track their progress and get live support from professional advisors. It also provides content like quizzes and projects that aren’t available to Codecademy users in its free offering.

Codecademy Pro Intensive provides more structured 8-10 week programs that include real projects students are asked to build using the same tools as professional developers. Each course costs $199 and is targeted at users who wish to learn specific skills to advance their careers, like building websites from scratch or building front end apps.

And for $500, users can sign up for Codecademy Pro Mentor, which includes all the same benefits and materials as Pro Intensive, but with the added bonus of 30-minute live video sessions with a mentor each week.

While the new paid products are just now being launched publicly, they’ve been tested extensively already. That testing included more than 20,000 Codecademy users that it was able to attract purely through internal email messaging. To date the limited beta has resulted in $6 million in revenue, which the company expects will grow significantly once it’s opened to all users.

That’s good news for investors, who have poured $43 million into Codecademy to date. That includes a $30 million round of funding raised last summer, which was led by Naspers but included previous investors Union Square Ventures, Flybridge Capital Partners, Index Ventures and Sir Richard Branson.

With the launch of a Pro product, soon Codecademy will be making even more money, which will make it even more valuable going forward.